Day-Lewis was born in London, the son of actress Jill Balcon and the Irish Poet Laureate Cecil Day-Lewis. Two years after his birth in London, the Day-Lewis family moved to Croom's Hill, Greenwich, where Daniel grew up along with his older sister, Tamasin Day-Lewis. Cecil Day-Lewis was already 53 years old at the time of his son's birth. Following frequent health problems, he died when Daniel was 15. Living in Greenwich, Day-Lewis found himself among tough South London kids and being Jewish and "posh", he was often bullied. Very quickly, therefore, he mastered the local accent and mannerisms — which he believes to have been the first convincing performances he gave.

He made his film debut at the age of 14 in Sunday Bloody Sunday in which he played a vandal in an uncredited role. He described the experience as "heaven", for getting paid £2 to vandalize expensive cars parked outside his local church. After two years at Sevenoaks, Daniel was transferred to the Bedales School in Petersfield. Leaving Bedales in 1975, he then applied at the Bristol Old Vic Theatre School, which he attended for three years, eventually performing at the Bristol Old Vic itself.

During the early '80s, Day-Lewis maintained an on-off career in the theatre, appearing in Edward II, A Midsummer Night's Dream, Look Back in Anger, and Dracula. He also starred in a series of serials for the BBC, including "Frost in May", where he played an impotent man-child; and "How Many Miles to Babylon?", as a World War II officer torn between allegiances to Britain and Ireland. Eleven years after his film debut, Day-Lewis continued his film career with a small part in Gandhi (1982) as Colin, a street thug who bullies the title character, only to be immediately chastised by his high-strung mother. In 1983, he had his big theatre break as the lead in Another Country.

In 1987, Day-Lewis assumed leading man status by starring in Milan Kundera's The Unbearable Lightness of Being, co-starring Lena Olin and Juliette Binoche, as a Czech doctor whose hyperactive and purely physical sex life is thrown into disarray when he allows himself to become emotionally involved with a woman. During the eight-month shoot he learned Czech and first began to refuse to break character on or off the set for the entire shooting schedule.

Day-Lewis put his personal version of "method acting" into full use in 1989 with his performance as Christy Brown in Jim Sheridan's My Left Foot which won him numerous awards, including the Academy Award for Best Actor. During filming, his eccentricities came to the fore, due to his refusal to break character. Playing a severely paralyzed character on screen, off screen Day-Lewis had to be wheeled around the set in his wheelchair, and crew members would curse at having to lift him over camera and lighting wires, all so that he might gain insight into all aspects of Christy Brown's life, including the embarrassments. He broke two ribs during filming from assuming a hunched-over position in his wheelchair for so many weeks.

In 1992, three years after his Oscar win, The Last of the Mohicans was released. Day-Lewis' character research for this film was well-publicized; he reportedly underwent rigorous weight training and learned to live off the land and forest where his character lived, camping, hunting and fishing. He even carried a Kentucky rifle at all times during filming in order to remain in character and learned how to skin animals.

Day-Lewis returned in 1993, playing Newland Archer in Martin Scorsese's adaptation of the Edith Wharton novel The Age of Innocence. To prepare for the film, set in America's Gilded Age, he wore 1870s-period aristocratic clothing around New York City for two months, including top hat, cane and cape during colder periods.

He returned to work with Jim Sheridan on In the Name of the Father, in which he played Gerry Conlon, one of the Guildford Four who were wrongfully convicted of a bombing carried out by the Provisional IRA. He lost a substantial amount of weight for the part, kept his Northern Irish accent on and off the set for the entire shooting schedule, and spent stretches of time in a prison cell. The film earned him his second Academy Award nomination, his third BAFTA nomination, and his second Golden Globe nomination.

In 1996, Day-Lewis starred in a film version of The Crucible based on the play by Arthur Miller and co-starring Winona Ryder. He followed that with Jim Sheridan's The Boxer as a former boxer and IRA member recently released from prison. His preparation included training for two years with former boxing world champion Barry McGuigan.

After a five-year absence from filming, Day-Lewis returned to act in multiple Academy Award nominated films such as, Gangs of New York, a film directed by Martin Scorsese (with whom he had worked on The Age of Innocence) and produced by Harvey Weinstein. In his role as the villain gang leader "Bill the Butcher" (who, ironically, has a pure hatred for Ireland and the Irish people), he starred along with Leonardo DiCaprio, who played Bill's young protégé. He began his lengthy, self-disciplined process by taking lessons as an apprentice butcher, and while filming, he was never out of character between takes (including keeping his character's New York accent). His performance in Gangs of New York earned him his third Academy Award nomination and won him the BAFTA Award for Best Actor.

After Gangs of New York, Day-Lewis' wife, director Rebecca Miller, offered him the lead role in her film The Ballad of Jack and Rose, in which he played a dying man with regrets over how his life had evolved and over how he had raised his teenage daughter. During filming he arranged to live separately from his wife in order to achieve the 'isolation' needed to focus on his own character's reality. The film received mixed reviews, while Day-Lewis received almost universal praise for his performance.

In 2007, Day-Lewis appeared in director Paul Thomas Anderson's loose adaptation of the Upton Sinclair novel Oil!, titled There Will Be Blood. Day-Lewis received the BAFTA, Screen Actors Guild Award (which he dedicated to Heath Ledger, Critic's Choice Award, Golden Globe, and Academy Award for Best Actor (2008) for his performance in the film.